Starting in November 2017, the Single Euro Payments Area (SEPA) Instant Credit Transfer scheme – SCT Inst – will allow businesses and consumers to make instant transactions of up to 15,000 euros in real time to any bank account within the EU. Transactions are guaranteed to be completed within ten seconds.
The scheme came about due to the recognised need for instant payment methods to be made available within the EU. Twenty-first century business and consumers expect fast, digital systems to be available, and payment systems had been lagging behind in this respect. A number of European countries had begun planning their own solutions to the problem, which led to concerns within the Euro Retail Payments Board about a lack of compatibility between systems. As a consequence, the board invited the European Payments Council (EPC) to create a pan-European euro instant payment scheme.
The EPC has described the SCT Inst scheme as “a world first, enabling individuals, businesses, corporates and administrations to make instant euro credit transfers between accounts across an international area that will progressively span over 34 European countries”. The scheme is based on the existing SEPA credit transfer scheme, which allows payments via credit transfers, direct debits and debit cards. Transfers under the existing scheme can take up to a day to complete.
As with the existing scheme, payment service providers (PSPs) from 34 European countries could potentially access the SCT Inst scheme. Those countries are the 28 EU member states, the four member states of the European Free Trade Association (Iceland, Liechtenstein, Norway and Switzerland), plus Monaco and San Marino.
There is no obligation for financial institutions to join the scheme. Those that opt in can join either as receivers of funds only, or as both originators and receivers of SCT Inst transactions. Although transfers are conducted in euros, the accounts held at participating PSPs do not have to be in euros. Services available under the scheme will operate around the clock on every day of the year. The scheme is flexible in that PSPs can agree either bilaterally or multilaterally to increase the value of transfers allowed and/or reduce the time in which transactions are guaranteed to be completed.
The EPC conducted public consultations to inform the design of the scheme, and incorporated their comments into the 2017 SCT Inst Rulebook version 1.0. From January 2017 PSPs can opt in and begin implementation, and the first pilot banks will begin testing in the first quarter of the year. Throughout the year the EPC will monitor progress, identify any issues affecting implementation and address them promptly. The SCT Inst Rulebook 1.0 formally enters into force on 21 November 2017 at 08:00 CET, and will remain in effect until November 2019.
Following implementation, regular public consultations will be conducted to ensure the scheme still meets stakeholders’ needs, and the maximum amount that may be transferred will be reviewed annually from 2018. Javier Santamaría, Chair of the EPC, said: “The launch of the SCT Inst scheme illustrates that we have entered a new era in payments, based on speed and innovation. Digital oriented and available 24/7/365, SCT Inst transactions will bring customers convenience and the certainty that money has been moved instantly. The SCT Inst scheme will pave the way for emerging methods of payment, such as person-to-person mobile payments.”
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